Secretary of Education Arne Duncan on the Parent PLUS Loan

Roland Martin talks with Secretary of Education Arne Duncan about the Parent PLUS Loan Program which forced thousands of students to discontinue their education because they were not able receive the loan, despite receiving it previously. Read the full interview below.

If you were affected by the loan program, please call 1-800-557-7394 or visit studentaid.gov.

ROLAND MARTIN: Ascot Nation, baby. Good morning, good morning, Tom. Good morning. A couple of days ago we talked about the Pair Plus Student Loan Program with Johnny Taylor, Head of the Thurgood Marshall College Fund, and of course, lots of parents, HBCU parents, have been talking about this as well, Text Tom Club as well, and so this morning we are talking with Education Secretary Arne Duncan about this program, the changes that were made to it, and where does it stand. He joins us right now. Secretary Duncan, good morning.

SECRETARY ARNE DUNCAN: Good morning Roland, good morning, Tom. Thanks so much for having me.

ROLAND MARTIN : Not a problem. This particular program, and talking with Johnny, HBCU Presidents, parents and others, they say some 14,600 HBCU students were unable to return to school in the fall as a result of changes to this program. And this has brought a lot of concern in that community but it goes beyond just HBCU parents. So, first of all, the program, the changes were made in dealing with the credit scores. Why were those changes made? And did your department make a mistake in not really communicating these changes to folks at large?

SECRETARY ARNE DUNCAN: Yeah, let me sort of step back and talk about more broadly what we’re doing basically and I’ll specially answer your question, Roland. Obviously we want to do whatever we can to support HBCUs. Now I said repeatedly we need to not just survive, but to thrive. If we’re going to hit the present goal of leading the world in college graduation rate by 2020 HBCUs has to play a huge role there. The big picture, we’ve done a lot to try and increase resources of HBCU’s Pell Grants to students. We’re about $488 million in 2007. Those are up to $996 million in 2011. Our student loan programs went from about $1.7 billion dollars to $2.7. Title III money that goes directly to institutions went from about $295 million to $383. So we’re trying to do everything we can to support on the Parent Plus specifically. There was no reinterpretation of the rules. We’re always are required to look at adverse credit. We announced that in October 2011 to financial aid office to communicate that at the highest levels to the presidents. And I’ve done a lot of personal outreach as has my staff. And where the big thing for your listeners to understand is where young people had these loans in the past and were denied. We could absolutely reconsider them. We’ve reconsidered many. And if I could I’d like to give out a phone number.

ROLAND MARTIN: Sure.

SECRETARY ARNE DUNCAN: We staff like 12 hours a day. That number is 1-800-557-7394. And I’ll give it again. 1-800-557-7394. We also have a website, studentaid.gov. And if students or families have any questions please call, and again, with people who have had this, would have the loans reinstalled sometimes within six minutes on the phone.

ROLAND MARTIN: One of the concerns in terms of doing the research on the story is that a lot of parents, the default rate was significant because this program has no cap in terms of loans. Was it also part of the part of the concern?

SECRETARY ARNE DUNCAN: It is a concern. And this is what we have to try and do, Roland, in all this stuff. We have to try to balance the interest of students, of institutions, the HBCUs themselves and other colleges, of families and of taxpayers. And the fact that these aren’t capped, there are some groups out there who are big advocates for students who actually want us to eliminate the program because they think it’s a little bit too similar to the subprime mortgage stuff with houses. And so we have to try and get this right, and we need to continue to talk with folks from the community, folks on The Hill, CBC and other members of Congress, to figure out what’s the sweet spot here. And this is just one program. Obviously there are others. We’re committed to the program, but we don’t want to put families in a financial situation they can’t recover from, that’s not right. The other thing people should realize is that if somehow they’re denied a Plus loan, they are automatically qualified, automatically eligible for $4,000 in federal Stafford loans, which is a different program that actually has a better interest rate and a more flexible repayment option. But at the end of the day we have to continue to make college more accessible and more affordable. And where Johnny Taylor and others are working so hard and actually writers where young people had accessed this money and then lost it. We can reconsider, we can try to bring them back in and we really, we definitely want them to reach out to us so that we can get them back in school. We had many students re-enroll for the second semester who came out for whatever reason in the first, but now as we go into the fall we want to plan and make sure that they’re back in school and getting those degrees.